Federal prosecutors unsealed a criminal complaint against New York Assembly Speaker Sheldon Silver, detailing long-rumored allegations about how a prominent asbestos law firm steered millions of dollars to the powerful politician in exchange for client referrals from a doctor, who in turn is accused of accepting favors from Silver.

The 35-page complaint by the U.S. Attorney’s Office in New York accuses Silver of accepting more than $5.3 million in payments from Weitz & Luxenberg, a New York law firm that specializes in asbestos lawsuits. Silver is also accused of obtaining the money in exchange for client referrals from an unnamed doctor in Manhattan who is cooperating with prosecutors under non-prosecution agreement. The doctor is accused of receiving substantial benefits from the Speaker, including $500,000 in grants for his mesothelioma research clinic and a job for a family member at a state-funded non-profit.

The complaint accuses Silver of using his office to obtain “referral fees” in exchange for little or no actual legal work, and failing to report some of them on his personal finance statements. He obtained more than $500,000 in fees from another law firm specializing in real estate appraisal appeals, prosecutors said. No one in Silver’s office was immediately available for comment.

It has long been known that Silver earned hundreds of thousands of dollars a year from Weitz & Luxenberg, but under New York’s lax reporting rules he wasn’t required to say exactly how much or what he did for the money. Today’s complaint provides more detail, showing how the extraordinarily lucrative business of suing over asbestos generates enough fee income to finance “research grants” to doctors who refer clients back to them.

Citing records pulled by the state’s short-lived Moreland Commission as well a a federal investigation, prosecutors say Silver parlayed his relationship with the physician identified as “Doctor-1″ to funnel clients to Weitz & Luxenberg in exchange for 33% of the firm’s take on any case. The doctor is further identified as running a mesothelioma research center at a major university, and having received a commendation from the Assembly in May, 2011.

According to the complaint, Silver met Doctor-1 through a mutual friend. The doctor had never referred patients to Weitz & Luxenberg because they didn’t fund mesothelioma research, the complaint says. Soon after learning that Silver had joined the firm in 2002, the doctor asked him if Weitz & Luxenberg would start funding research.

Silver told him he should start referring his patients to the firm, prosecutors say, and that state funds were available for his research. (New York allocated $8.5 million a year to a discretionary fund, controlled by Silver, for healthcare grants, until that fund was discontinued in 2007.) Seven weeks after the doctor made his first referral to Weitz & Luxenberg, records show, he made a $250,000 grant request to the state. The letter was addressed to Silver. On July 5, 2005, Silver directed a $250,000 grant to the doctor’s mesothelioma center. The letter said the money would be for mesothelioma research including on the effects of the Sept. 11 catastrophe in Silver’s district, but didn’t mention the client referrals Silver was getting.

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A Christchurch community board chairwoman has got into a spat with a demolition company over her concerns about their handling of debris from a house containing asbestos.

Last week Avondale resident Andrea Cummings wrote on her Facebook page that she was shocked to see workers wearing hazardous materials suits and masks loading demolition material into a bin next door to her home.

No-one had told her what was happening and she feared the material contained asbestos, potentially putting her family “only 3 metres away” at risk.

A WorkSafe New Zealand spokesman told The Press it visited the demolition site last week and reviewed a video posted online by Cummings.

“On the basis of the information that we’ve got, we’re satisfied that the work is being undertaken appropriately,” he said.

Cummings said the company had tried to bully her into withdrawing her concerns.

She is the chairwoman of the Burwood-Pegasus Community Board, but said her comments were made “as someone who wants to advocate for the community”.

The posts were made on her personal Facebook page but were visible to the public.

Pro Tranz Ltd owner Gerard Daldry said the company had not bullied Cummings but wanted her to apologise for making public comments that were “completely not true”.

“We’ve bent over backwards to help her. What she has done is actually quite detrimental to the whole thing.”

Pro Tranz was required to notify only WorkSafe New Zealand when it came across asbestos, but he agreed the company should have told Cummings about what was happening next door to her.

“Normally we do. That was probably a shortfall on our behalf,” Daldry said.

Asbestos specialists removed most of the contaminated material before demolition work started last week but some under the floor had not been accessible until the top of the building was removed.

Daldry said the bin near Cummings’ fence was for general demolition material, not material containing asbestos.

It had all been dampened down with a hose to minimise any dust before it was picked up and moved into the bin.

People had a “right to worry” about asbestos, he said, but Cummings and her family were never at any risk of exposure.

He said she should have discussed her concerns with him or WorkSafe New Zealand rather than posting publicly on Facebook.

“I don’t want this to have an adverse effect on the industry. People need to be better informed. “Let’s make this something that’s a learning curve for everybody,” Daldry said.

AetnaAetna won a judicial ruling giving it access to filings made by asbestos claimants in the bankruptcy of gasket maker Garlock Sealing Technologies, opening a new front in the battle between plaintiff lawyers and companies that accuse them of double-dipping and fraud.

In a hearing yesterday, U.S. Bankruptcy Judge George R. Hodges granted the motion of Aetna to examine so-called Rule 2019 statements lawyers have filed in the Garlock bankruptcy. The statements, named after a provision of the federal bankruptcy code, require lawyers to identify clients with claims against the bankrupt company as well as the nature of those claims. Aetna is one of several insurers seeking asbestos claims information to try and recover medical expenses from customers who have been paid for the same costs through litigation.

Hodges denied similar requests from Ford, Volkswagen, and other companies that are seeking access to other sealed documents from a trial over Garlock’s asbestos liabilities. The judge deferred that request, saying it is already being considered by a federal court weighing an appeal by Legal Newsline, a publication funded by the U.S. Chamber Institute for Legal Reform.

“Get all of these things done at once,” Hodges said, according to a report in Legal NewsLine. “I don’t know about y’all, but I would find that helpful.”

The companies want access to Rule 2019 filings and evidence from the estimation proceedings to bolster their own defenses against asbestos claims. Garlock has sued several law firms for fraud, accusing them of deliberately withholding evidence that their clients had been exposed to other sources of asbestos in order to win larger settlements from Garlock.

“The fact that each and every one of them contains such demonstrable misrepresentation is surprising and persuasive,” the judge said, slashing Garlock’s estimated liability to $125 million.

Plaintiff lawyers objected to Aetna’s request, saying they and their clients “have legitimate interests in the continued confidentiality of those materials.” But Hodges overruled them, said a Garlock attorney who attended the hearing in Charlotte, N.C. A federal court in Delaware considering this issue last year ruled the filings are public judicial records and that using such information in litigation is a “quintessentially proper purpose.”

Know your fibers. (Photo credit: Asbestorama)

Plaintiff lawyers, operating as the Official Committee of Asbestos Personal Injury Claimants, also said Aetna had no use for the information in 2019 filings because it already knew the names and addresses of its customers and could obtain details about their asbestos suits from public court records. If their purpose is to file subrogation claims to recover money spent on treating asbestos-related diseases, the lawyers said, several states including New York and Arizona don’t allow insurers to sue for reimbursement of the money their customers win in litigation.

“Their stated purpose does not square, logically or practically, with the requested relief, which may suggest that their real motivation is unstated.” the plaintiff lawyers said.

The plaintiff lawyers aren’t being completely forthcoming with their motives, either. A comprehensive database of filings by asbestos claimants might show, as Judge Hodges found in his examination, that lawyers are tailoring the stories their clients tell in order to maximize recoveries at the expense of the facts.

Lawyers frequently sue solvent companies like Ford and Volkswagen first with claims that would stand little chance of surviving if jurors knew that the plaintiff was exposed to far more dangerous concentrations of asbestos made by bankrupt companies. They then file claims with bankruptcy trusts that are set up and overseen by plaintiff lawyers and generally refuse to share claim details with each other, let alone the public. This one-two strategy has helped drive otherwise solvent companies like Garlock into bankruptcy as plaintiff lawyers ratchet up their settlement demands, confident that conflicting evidence of exposure won’t appear in court.

Another reason lawyers might not want the 2019 filings made public is they could show how they are splitting fees among referral firms, which run ads on TV and the Internet to bring in potential clients, and firms that specialize in litigating and settling cases. Ethics rules prohibit lawyers for collecting a fee simply for referring a client; they are supposed to perform meaningful work on the case. The 2019 forms might show how many law firms are sharing in the fees from a single, lucrative mesothelioma client and raise questions about whether they are complying with ethics rules.

Hodges will determine next week how to provide Rule 2019 filings to Aetna. Among other concerns, some of the forms might contain Social Security numbers and other data that could facilitate identity theft. Plaintiff lawyers say the forms also contain confidential medical data, but no more than each plaintiff has already included in public lawsuits.

The carryover effect of asbestos and the death and damages from mesothelioma are both still many years away from coming to an end. In fact, some of the new mesothelioma cases may still not even be discovered for another decade or more. Armstrong World Industries Inc. (AWI) has been a public company since after its bankruptcy in late 2006. The Armstrong World Industries Asbestos Personal Injury Settlement Trust and Armor TPG Holdings, under the private equity firm TPG, had more than 50% controlling interest and they are lightening up on the position.

24/7 Wall St. does not view this as a localized or single-entity issue. Our belief is that other asbestos trusts around the country should consider copycat offerings like we have just seen. The company makes and sells flooring products and ceiling systems, and it is still living under the control of its post-bankruptcy under its former employees’ asbestos trust and private equity.

Shares were within striking distance of a 52-week high of $58.48, and the chart reads differently than the actual all-time highs because of three one-time dividends of around $27 per share in total since 2006.

What we find interesting about this offering is that it was upsized to 12,057,382 common shares. The previous amount was to be an offering of 10,057,382 shares, an indication of strong demand. One thing helping the demand was that the company stepped up to the plate and bought about half of the offering. Another reason that asbestos trusts might want to consider doing copycat offerings for their mesothelioma patients and future claims is that the $51.75 offering price was never even seen on the downside, and the stock is up from a week earlier and is back at the highest level in months.

Wall Street often makes for a strange partner when it comes to finances. It seems that the investment community is happy to have this much less influence from the former Armstrong World employees and dependents asbestos trust out from the daily workings of the new Armstrong World.

As of December 12, 2013, the Armstrong World Industries Asbestos Trust held more than 25.3 million shares of common stock. The pre-offering control by the trust came to more than 40% of the value of the more than $3 billion market cap of Armstrong World Industries. In short, there are still many shares here that can be sold in the future, and it was refreshing to see a secondary offering this well received by Wall Street.

Also note that Moody’s recently issued a negative outlook on Armstrong World’s corporate credit rating to reflect that the controlling shareholders are negatively affecting Armstrong’s liquidity profile in an effort to enrich themselves. Still, the stock went above its offering price.

You could almost make the argument that asbestos trusts around the country might even be able to use Wall Street to their advantage in this strong stock market. If you run an asbestos trust or are in a mesothelioma class holding many shares of recapitalized post-bankruptcy stocks, you might want to consider looking to see if the Armstrong World situation is applicable to you.

LEEDS, UNITED KINGDOM–(Marketwired – May 9, 2013) – Asbestos victims are set to be denied the right to receive the compensation they fully deserve on the Mesothelioma Bill outlined in the Queen’s Speech yesterday. It was announced that sufferers of mesothelioma, only one type of asbestos-related cancer, will receive compensation where no liable employer or insurer can be traced. This means that those suffering from other forms of asbestos-related cancer, such as asbestosis, will be excluded from receiving similar compensation.

Commenting on the Bill, John Spencer, Director of Spencers Solicitors, a leading personal injury claimant law firm based in Chesterfield, said:

“All victims of asbestos related disease should receive the urgent compensation they deserve. It appears that the future fund announced in yesterday’s Queen’s speech will not go anywhere near far enough in ensuring justice for all victims of asbestos.

“Support for mesothelioma victims is long overdue, but it is not right that those who suffer other lung cancers or conditions caused by asbestos may get nothing under the proposed legislation. We urge MPs and Peers to amend the legislation to tackle this injustice.”

Unfortunately the injustice does not stop there. For those that can claim under the new legislation, only those who are diagnosed with mesothelioma from 25 July 2012 can make a claim. This denies compensation to the thousands of people who have already been diagnosed with mesothelioma before summer last year.

The Government estimates that more than 300 mesothelioma sufferers a year currently lose out on compensation because they are unable to trace a liable employer or employers’ liability insurer. The new scheme, funded by insurers, estimates that around 3,500 mesothelioma victims across the UK will be eligible to receive approximately £300m in payments in the first 10 years of the fund.

John Spencer said of implementing the new legislation:

“It is of paramount importance that the Bill is introduced as early as possible and implemented speedily in order for inflicted victims to be given the compensation they urgently need.

“The sad reality is that any delay to implementing the legislation might mean that many of those applying to the fund might die before they receive any award.”

Notes to editors:

Spencers Solicitors (www.spencerssolicitors.com) is one of the UK’s leading firms of personal injury solicitors. Based in Chesterfield, Derbyshire, Spencers is committed to protecting its clients’ best interests by putting duty before profit, and campaigning for justice for those affected by negligence and statutory breach, and for the improvement of professional standards and business practices within the personal injury system.

An industrial disease expert has warned how family members of workers might have been unwittingly exposed to deadly asbestos by their loved ones decades ago.

Bridget Collier, head of the Industrial Disease Claims team at Fentons Personal Injury Solicitors LLP, said the recent case of a woman in her 70s who died from mesothelioma had highlighted how asbestos dust represented a danger not just to those who worked in heavy industry, but also to their wives and children.

“Only last month a coroner recorded a verdict of death by industrial disease after a 78-year-old woman succumbed to mesothelioma,” said Bridget (left), a partner with the firm. “The court heard how the woman had breathed in asbestos fibres as she shook out the work clothes of her husband and son, who worked at a power station.

“Whilst a tragic case in itself, it has served as a stark warning that entire families might be unaware that they have been exposed to asbestos.”

Bridget, who for many years has seen first-hand the devastating effects mesothelioma has on victims and their relatives, said that although the number of mesothelioma cases reported in the UK continued to increase, there was a concern that some were still being overlooked because people simply did not realise they had been exposed to asbestos.

“Mesothelioma is a dreadful, cruel and painful disease, and kills one person every five hours in the UK,” she said. “This tragic case is just the latest where the victim was not directly exposed through her own work, but instead from washing dirty clothes and cleaning up after her family members.

“We have encountered a large number of cases like this one, where a diagnosis of mesothelioma has been met with complete surprise because the victims themselves never worked in one of the industries readily associated with the disease – such as mining, ship-building, construction, plumbing and electrical work,” she said. “However once we learn more about the history of the victim, the root of the exposure becomes clear.”

Bridget said she had heard stories of wives beating their husband’s dusty overalls as they hung on a washing line, or shaking them off in a doorway before putting them in a washing machine.

“Children and even grandchildren have also been put at risk, running up to a returning parent to give them a hug as they return from work, or sitting on their knee as they wear their dusty work clothes,” she said. “The risk of loved ones being accidentally exposed is unfortunate and just adds to the tragic legacy of asbestos. But as this latest case shows, it is something that family members need to be made aware of.”

She advised anyone who begins to suffer from symptoms – such as a cough that will not go away, or developing breathlessness when doing something that would ordinarily not have caused such a problem – to see their doctor.

“It can take between 15 and 60 years after being exposed to asbestos before any related disease becomes apparent,” said Bridget. “Many people who are diagnosed often came into contact with asbestos several years ago and didn’t even realise, so it is vitally important to be vigilant now.”

How can Fentons Solicitors help?

Fentons has a specialist department experienced in handling claims for victims of industrial diseases including mesothelioma and other asbestos-related illnesses.